The detrimental effects of abandoning online bookings go beyond lost revenue
Think about the last time you found yourself window shopping. Maybe you were walking back to your car after lunch with a friend, and as you passed a storefront, something in the display caught your eye. You stop at the window, put your hand on your forehead to protect your eyes from the sun and get a better view of the store that extends behind the display. Now if it was an item of clothing you were hoping to buy, and you went into the store, talked to the salesperson, tried on the item, and took it to the checkout only to run out the moment you were asked a payment – this may seem like a strange behavior.
However, thanks to digital technology and the rise of e-commerce, we can shop on virtually any device from virtually anywhere. And abandoning a cart before the final click has become a costly problem for businesses, especially hoteliers.
Hotels spend a significant portion of their operational budget on conversion rate optimization, yet a SaleCycle survey shows that 85% of visitors leave before finalizing their reservation. Data from a hospitality report estimates $10 billion in lost revenue over a full year.
Hotel brands spend an incomprehensible amount of time refining their offerings, perfecting their service delivery, and organizing advertising efforts that tug on the “wanderer strings” of potential travelers. But what about the guests who make the decision not Reserve? It can be tempting to just focus on bookings made – but what about all the bookings that have fallen through the cracks? Should hoteliers be content with letting so many quasi-guests walk out the door of their hypothetical storefront when asked to confirm their reservation?
Look beyond the transaction
Hoteliers aren’t just about building beautiful hotels and exciting guest experiences, they’re about building relationships. When potential travelers abandon their reservation, the hotel does not simply lose the revenue associated with that reservation. Instead, they lose an opportunity to build a relationship with a new guest. Conversely, when hotels can build personalized, meaningful connections with their customers and inspire long-term loyalty, the lifetime value of that customer far exceeds the revenue generated from a single booking.
Guest relations are the heart and soul of hospitality. When hotels consistently lose business at the time of booking, they lose the opportunity to convert a potential guest into a lifetime loyal guest. Additionally, the more customers lost due to booking abandonment, the more hotels have to spend to attract new leads. This is particularly alarming considering that the cost of customer acquisition in the hotel industry represents on average 15% to 25% of revenue paid by customers, with many hotels spending up to 35% of revenue paid by guests customers to put new heads in the beds. . In other words, if hotels don’t actively work to reduce their booking abandonment rate, they will spend significantly more to maintain their current occupancy level.
Simplify the booking experience
With only 0.58% of guests booking online, the problem is clear: most hotels are too slow to pick up and re-engage direct bookings. The question is: what prevents completed reservations? According to Phocuswire, the most commonly cited reason for an abandoned travel reservation is the need for more research time or the desire to compare prices.
In many cases, travelers also need to check with other travelers within their group before booking or find the booking process/user experience offered by the hotel’s digital interface too long, complex or counterproductive. -intuitive. Perhaps that should come as no surprise – for decades the hospitality industry has approached reservations much the same way, despite the ever-changing digital landscape.
If we know that over 50% of travelers begin their hotel experience and relationship online, how do we streamline and optimize that online experience to ensure a great first impression? How can hotels expect most travelers to confirm their reservation if they rely on outdated interfaces, a lack of useful information and poorly targeted messages?
Now, more than ever, the booking process must be intuitive and fluid. Although the war between direct bookings and OTAs has been raging in the hotel industry for a long time, direct bookings are believed to be on the rise in 2022 and are expected to overtake OTA bookings by 2023. This is great news for hoteliers, as this demonstrates the demand for direct bookings. It is simply up to the owners and operators to position themselves correctly to take advantage of it.
Fortunately, hoteliers can implement a booking abandonment solution to streamline and simplify the booking process and re-engage travelers who need more time to make a booking decision. With the right remarketing technology, hoteliers can automatically entice “almost guests” to make their reservations once they’re ready.
The power of a booking abandonment tool
A reservation abandonment tool is software developed to recover lost reservations by capturing customer data as they enter it into the reservation form. If they don’t complete their booking, hotels can always reach out to them to capture the booking once they’ve satisfied their appetite for pre-trip research and competitor pricing. Easily integrated with existing booking engines, it starts working immediately to track real-time website visitor data. Customizable cross-channel campaigns are triggered based on behavior, delivering the optimal combination of intent-driven emails, SMS reminders, and web push notifications to re-engage visitors and turn them into delighted customers. More importantly, these emails include information on rooms, dates, prices, etc.
To demonstrate the impact of this technology, let’s take an example where your hotel website generates 10,000 leads per month. We know that most hotels hover around a 2% conversion rate, which means 200 guests will book a stay. However, data shows that more than 80% of reservations are abandoned, which equates to 8,000 potential customers waiting to be picked up. Recovering as little as 1% of these lost reservations would result in 80 additional secure reservations, an increase of 40%. Also, this example only considers potential lost revenue regardless of the amount spent to acquire each lead or the true lifetime value of a happy, loyal customer. There is no denying it; without a booking recovery strategy in place, hotels not only lose potential revenue, but also limit the effectiveness of their marketing investments.
If hotels wait too long to act on abandoned reservations or never act on them, they increase the likelihood that a potential guest will make reservations with a competitor. In our ten years as the leading eCommerce solution for cart abandonment and remarketing, we’ve helped over 5,000 websites recover lost revenue. We’ve also helped our hotel clients achieve a 30% increase in average order value for reclaimed bookings and an incredible average ROI of $40:1.
If the saying is, “Strike the iron while it’s hot,” using our RezRecover reservation abandonment tool gives hoteliers the ability to strike every time the iron heats up. We love the sound of those probabilities, don’t you?
RezRecover by CartStack